Opportunity Zones for NextLevel Indiana
Public Law 115-97, also known as the Tax Cuts and Jobs Act of 2017, allows the Governor of each state to nominate certain census tracts as "Opportunity Zones".
What is an Opportunity Zone?
The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) allows governors to nominate certain census tracts as Opportunity Zones, subject to approval from the U.S. Department of Treasury. Up to 25% of a state’s low-income census tracts may be designated, which permits Indiana to nominate up to 156 census tracts as Opportunity Zones.
Opportunity Zones provide certain investors with federal capital gains tax advantages for investments made in these areas. This designation is intended to attract capital investment into areas that are economically distressed.
States that request a 30-day extension are required to submit their lists of Opportunity Zones to the U.S. Department of Treasury by April 20. Indiana will request an extension.
To be eligible as an Opportunity Zone, census tracts must qualify as “low-income”. To do so, the census tract must meet one of the following requirements:
- The tract has a poverty rate of at least 20%; OR
- (A) For a census tract in a metropolitan area, the tract’s median family income does not exceed 80% of the greater of: the metropolitan area median family income or the statewide median family income; or (B) For a census tract in a non-metropolitan area, the tract does not exceed 80% of the statewide median family income.
However, if the census tract is located within a high migration rural county, the tract qualifies as low-income if it does not exceed 85% (as opposed to 80%) of statewide median family income. A “high migration rural county” is any rural county that, during the 20-year period ending with the year in which the most recent census was conducted, has a net outmigration of inhabitants from the county of at least 10% of the county population at the beginning of such period.
The U.S. Department of the Treasury has published a map and list of eligible census tracts, available here. All census tracts designated as eligible using this tool are eligible for designation as an Opportunity Zone.
Note: If a community believes that a census tract not listed as eligible on the Department of Treasury map is eligible using the recently released 2012–2016 American Census Survey 5-Year data, that tract can be nominated so long as supporting information from the 2012-2016 data is included with the nomination.
Looking for more information about Opportunity Zones? The U.S. Department of the Treasury and the Economic Innovation Group have provided more information here and here. The text of the legislation creating the Opportunity Zone program can be accessed here.
How will the Governor determine which zones to nominate?
Governor Holcomb will nominate 156 census tracts with the help of a group of advisors from around the State. Census tracts will be selected based on a combination of factors, including existing economic development programs and local coordination of efforts, demographic data, likelihood of attracting short- and long-term investment, growing industry sectors within the community, and recommendations and information submitted through the online application below. Recommendations from the public must be submitted on the below application no later than March 23.
If you have any questions or problems submitting your recommendations, please email email@example.com